News Releases

Although consumer spending will slow in 2008, it will continue to be one of the bright spots for PEI, helping to offset sluggish manufacturing activity, according to a provincial economics outlook released today by BMO Financial Group.

“Housing starts are tracking below levels from a year ago, but consumer activity is robust helped by personal income tax cuts,” said Doug Porter, Deputy Chief Economist, BMO Capital Markets. Mr. Porter added that a strong loonie should put a damper on tourism as Canadians increasingly head south of the border.

Highlights of the report include:

• GDP growth should slow to 1.5 per cent this year and then rise to 1.9 per cent in 2009.
• Housing starts are expected to total 1,200 over the next two years.
• Unemployment rate expected to increase slightly to 10.4 per cent in 2008 and 10.7 per cent in 2009.
• Reflecting an increase in capital investment and borrowing on behalf of Crown corporations, total borrowing requirements are forecast to be $171 million.

The complete report can be found at www.bmocm.com/economics.

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